First of all, we are in an epidemic of people spending above their means. They make £2000 a month in their job, but spend £2000 a month on their cost of living.

So depressed and bored with their existence, any money they have left over is spent on going down the pub, buying a new £500 TV, new shoes, a new car on finance, new clothes to make them feel better etc etc.

Things that rust, rot and depreciate in value.

Bad investments.

As a result they have no money left at the end of the month.

And so the next month comes and they repeat the same process. Until 10 years down the line they are in the exact same financial situation.

They may have gotten a pay rise this year and taken an extra £50 a month after tax. But they quickly find a way to spend that each month.

The ONLY way out of this endless cycle?

To spend less than you earn.


Think about that for a second. Has anyone ever suggested that to you before?

I heard that for the first time at aged 30 and it blew my mind.

Its my bloody money! Of course I should get to keep some of it.

You’re paying the tax man, the electric company, the council, the landlord, the clothes shop, the shoe shop the tv shop, and yet…….you are not keeping any for yourself. It’s insanity.

If you make £2000 a month, you should at least be taking £200 a month for you. I’d argue £300.

Now many will say to me “but I cant afford to live on £1700 a month!”.

Of course you can, you just CHOOSE not to.

Are you telling me that no one in the world manages to live off £1700 a month?

Of course it’s possible.

What would you do if tomorrow the government introduced a new tax at £300 a month?

You’d jump up and down, wave your arms about and scream for a while. But you’d pay it, cause you’d have to.

What if you lost your job and could only find a job paying £1700 a month? You’d have no choice but to take it. And you’d learn to adapt.

You’d move to a cheaper house, get a cheaper car, be more clever about your outgoings, look for savings everywhere you can. You’d find a way. And to be honest, £300 a month less will not dramatically lessen your quality of life. But it will dramatically improve it, over time.


If you spend less than you earn, and pay yourself 10-15% a month, you can then put that money to work.

Here’s what me and the mrs are doing……

We take 15-20% of everything we earn and put it into a separate account. Done and dusted. You can even automate it so it just happens.

Lets say you make £2000 a month. That’s £400 put aside (20%). You then live off the £1600 leftover. So you have to make sure you live somewhere you can afford, have a car you can afford to run. Etc etc. Staying within that £1600 limit per month.


50% (£200) goes into a SAVINGS POT first. You want 6 months of income in there eventually. So you pump into that first. This is a rainy day fund. If you ever cant work for any reason or something goes wrong, you can live knowing you have at least 6 months of outgoings tucked away that you can use in an emergency. This feels amazing, trust me. A weight is lifted when you reach this point.

25% (£100) goes into an INVESTMENT POT. This is where you make your money work for you. Initially you might want to invest in yourself. If I buy a 2nd hand book for £5 that teaches me how to make an extra £50 over my lifetime, I’ve achieved a 10x return on my risk. I’ve read £5 books that have taught me how to make thousands. Use this pot to learn new skills and add to your income. Whether that’s starting your own side business or earning more salary working for someone else. Because more income means your 10-15% you pay yourself is even more. More going into the SAVINGS POT, more coming back into the INVESTMENT POT. (You start to see how this begins to spiral upwards right?).

Lets say I then start a side business which brings in £400 a month profit. Well, now my income rises to £2400.

20% of £2400 is £480. 50% SAVINGS = £240/M. 25% INVESTMENTS = £120/M.

But now you have a cost of living of £1920 (£2400 – £480).

So now you can maybe get a slightly nicer car, or a slightly bigger home up to a limit of £1920.

You’re almost back where you started, only this time, you’re able to afford those things and still pay yourself the £480/m.

With the £120/m investments maybe you’ll raise your income to £2600. Your cost of living budget increases, as do your savings and investments.

But what about the final 25% of what you keep? If 50% is in savings and 25% in investments, what of the final 25%

Well, what good is money if you can’t enjoy it?

The final 25% is the FUN POT. This is money you spend on experiences and doing awesome things or treating yourself to nice clothes. Whats the point of earning money if you never get to spend it until you’re old? The difference here is you’re not spending all your money on things that rust, rot and depreciate. You are saving and investing for a better future, but also getting to enjoy some of the money as well. And with a budget, you will be way more careful about how you blow that money.

In addition, whilst early days this fun pot will be small and may not stretch far, as you save and invest, raising your income, your fun pot will also grow within your means. Meaning you have guilt free spending. You’re SUPPOSED to spend that 25%!

Finally, you can adjust these % figures. They are just a guide. You may want to put 75% in SAVINGS and 25% fFUN with no investments at first. To speed up the security buffer behind you. These savings are only for emergency situations like a health issue perhaps or losing a job.

THEN you can put less in SAVINGS each month and more in INVESTMENTS perhaps once you hit your magic figure.

Eventually you can put 25% in savings and 50% in INVESTMENTS perhaps once you’re sitting on a £10,000 SAVINGS account perhaps.

That’s up to you.

Why we never get taught this stuff at school I do not know. It would save so many people from 20-30 years of going round in financial circles never having enough money to do anything with.

And if you have kids, get them started on this now. Start them saving 10% of everything they make. Imagine where they will be aged 21?

So if you’re struggling to find more to play with, focus down on your financial setup. Are you spending more than you earn? How can you live on less? It may require some short term sacrifices until you can grow your income. How can you invest the money to raise your income? There are many different ways, including investing in yourself.

Just spreading good ideas this afternoon.

Hope its useful to some of you. If it has helped you at all in any way, please share.


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